When Magical Realism Becomes the Norm: A Look at the Top 10 "Absurd" Events in the Web3 Industry of 2025

Author: Eric, Foresight News

At the end of 2022, I reviewed the bizarre incidents that occurred that year. After three years, I am once again summarizing Web3 in 2025 in the same way.

Time has passed, and compared to three years ago, Web3 in 2025 has undergone a complete transformation. Basic mistakes like sending to the wrong address or setting incorrect parameters are now rare. Although the events this year are not as “funny” as back then, they are just as outrageous, if not more so. It can only be said that human nature, the greatest playwright, continues to exert its influence.

Mysterious team manipulates presidential concept Meme coin, harvesting over 100 million USD

Event Details

Early this year, the election of Donald Trump as the new US president and the issuance of Meme coin TRUMP was widely known. Subsequently, Melania Trump and Argentine President Milei also promoted MELANIA and LIBRA tokens on their personal social media accounts on January 20 and February 15, 2025 (tweets about Milei have been deleted).

There’s nothing much to say about Melania issuing coins; selling after issuance is common in the PvP Meme coin circles, and everyone accepts it as bad luck if they lose money.

Milei’s issue was more serious. Within hours of LIBRA token launch, the project team withdrew $87 million USDC and SOL from the liquidity pool, causing the price to plummet over 80%. Such withdrawal behavior is intolerable to P-level players and sparked widespread condemnation. Milei deleted the tweets and launched an anti-corruption investigation after the incident fermented. Later, the community exposed that KIP Protocol and Kelsier Ventures were behind LIBRA, but KIP Protocol claimed only to handle technical supervision, while market maker Kelsier Ventures’ Hayden Davis accused the presidential team of “regretful reversal” causing panic.

Subsequently, Bubblemaps conducted rigorous on-chain fund flow analysis, revealing that both MELANIA and LIBRA deployment addresses are highly associated with the same address, involving Rug Pull projects like TRUST, KACY, VIBES, etc. LIBRA market maker Kelsier Ventures was also called a “family-style criminal group” by crypto KOLs.

Additionally, inside Milei’s government, an “insider” was exposed—Milei’s confidant received $5 million to promote LIBRA on Twitter. Millions of dollars for over 100 million USD—definitely a lucrative deal.

Reason for Selection

This might be the “smallest words, biggest matter” farce in this article. When capital and politics jointly stage a “robbery,” who can we still trust?

Outrageousness Index: ★★★★★

Infini employees embezzled nearly $50 million in crypto trading

Event Details

On February 24, Beijing time, stablecoin digital bank Infini was hacked, with $49.5 million flowing out from Morpho MEVCapital Usual USDC Vault. After the incident, founder Christian immediately admitted the theft and promised full compensation even in the worst case.

Later, the Infini team on-chain told the hacker they had obtained a lot of information about the hacker, and if the hacker returned 80% of the funds (20% as white-hat bounty), they would not pursue legal responsibility. On February 26, the team issued a final ultimatum on-chain, but the hacker took no action. The next day, Christian announced that the Infini hacker case had been officially filed in Hong Kong.

Less than a month later, Infini released litigation documents, revealing that the “hacker” was actually a capable developer within the Infini team, trusted by the team. This person, named Chen Shanxuan, had the highest permissions for managing company and client funds contracts, and during the transfer of permissions after development, exploited the team’s trust to secretly retain control of the address controlling the contract. So, the so-called hacker incident was actually an insider theft farce.

As for why this brother took such risks, the Infini team said they only discovered Chen Shanxuan’s gambling addiction after the theft, and despite earning millions annually, he kept borrowing money to open contracts. As online loan debts increased, he eventually went down the wrong path. According to Colin Wu, Chen Shanxuan was once a model of sharing technical knowledge, but ending up like this is truly lamentable.

Reason for Selection

Entrepreneurship and investment are different. From the lofty “cognition realization” to “getting your hands dirty,” Web3 entrepreneurs still need to hone their skills. One more thing: unless you are exceptionally talented, avoid contracts.

Outrageousness Index: ★

UMA whale manipulates oracle results to forcibly “change reality”

Event Details

On March 25, 2025, an oracle attack occurred on Polymarket, which was very popular during the US presidential election. In the “Will Ukraine agree to Trump’s mineral agreement before April?” market, as the deadline approached, the probability of “Yes” was near zero, but suddenly reversed on the evening of March 25, with the “Yes” probability soaring to 100%.

The reason for the reversal was not Zelensky softening, but a large UMA holder participating in the $7 million market used their substantial UMA holdings to forcibly alter the outcome. User DeFiGuyLuke (https://x.com/DeFiGuyLuke/status/1904804207452184622) explained the details:

When Polymarket needs event results, it first requests data, and proposers submit data along with a deposit of 750 USDC. After submission, there is a dispute period during which others can challenge the result by paying an equal deposit. Ultimately, all UMA holders vote to decide the outcome.

In the Ukraine mineral agreement market, a whale holding 5 million UMA votes for the incorrect outcome, fearing loss. This voting set a precedent, causing ordinary users to worry about being unable to oppose whales and thus colluding, leading to this situation.

Polymarket later admitted it was a mistake but considered it part of the game rules and refused to change the result. In August 2025, UMA introduced a whitelist mechanism, allowing only approved entities to propose resolutions, to reduce malicious manipulation. However, this did not change the core oracle but optimized governance.

Reason for Selection

Can Polymarket’s approach be considered decentralization? As a new truth machine, ignoring oracle errors should be regarded as a product design flaw.

Outrageousness Index: ★★★

TUSD fund misappropriation case: a mistake or deliberate?

Event Details

On April 3, 2025, Sun Yuchen held a press conference in Hong Kong, accusing Hong Kong trust institution First Digital Trust of illegally transferring $456 million USD of TUSD reserves, demanding law enforcement investigate. However, the Hong Kong court rejected his request. A month earlier, the Dubai International Financial Centre Court (DIFC) issued a global freeze order on $456 million related to TrueUSD issuer Techteryx, citing breach of trust and ordering asset freeze to protect assets.

The truth of this matter is highly debated, with no definitive conclusion yet. Here are some publicly available details.

Techteryx Ltd., a registered investment firm in the British Virgin Islands, acquired the TrueUSD stablecoin business at the end of 2020, responsible for its operation and management. Based on business continuity, the original California-based operator TrueCoin was retained to manage reserves and coordinate with banks, and Hong Kong trust First Digital Trust was chosen as custodian for reserves. Public info shows Sun Yuchen as Techteryx’s “Asia Market Advisor,” but DIFC 2025 documents and hearings describe him as Techteryx’s “ultimate beneficial owner.” To some extent, Sun Yuchen controls Techteryx but is not the official legal representative.

However, this inconsistent identity laid the groundwork for subsequent events. From Sun Yuchen’s perspective:

Between 2021 and 2022, TrueCoin, as trustee, formed close ties with the Hong Kong trust FDT and some management of Legacy Trust, and created a covert fund channel with Cayman Islands-registered Aria Commodity Finance Fund (“ACFF”). Sun Yuchen stated, “With control over reserve instructions and fund flow, forged documents and fabricated investment instructions were repeatedly submitted to banks.”

Court evidence shows that the reserves were not deposited into the compliant Cayman fund ACFF as agreed, but secretly transferred in batches to Dubai’s Aria DMCC, controlled by British citizen Matthew Brittain’s wife, which was not authorized by Techteryx.

In simple terms, Sun Yuchen believed Techteryx asked FDT to transfer reserves to ACFF, but FDT transferred the money to Aria DMCC, suspected of embezzlement.

From FDT’s perspective:

An “authorized representative” Lorraine requested FDT to transfer reserves to ACFF. FDT believed they did not receive a genuine request from Techteryx’s actual controller, and due to distrust of this representative, they did not transfer funds to ACFF but instead to Aria DMCC (the logic here is unclear; the two companies are interconnected, but FDT provided no further explanation). They also claimed the current asset allocation still yields returns.

The key point is, FDT claims they never embezzled funds; as long as Techteryx’s actual controller issues instructions, they can recover the money. The crucial part is proving who the actual controller is.

There are two ways to recover the $456 million: either Techteryx’s legal controller explicitly requests FDT to retrieve the funds, or if not, prove FDT’s illegal actions to the court to order FDT to return the funds. Due to Sun Yuchen’s special status, only the latter is feasible.

The most interesting part is that during an online court hearing about Techteryx, which Sun Yuchen did not attend claiming he was not the legal person, a person named Bob suddenly appeared. When the judge asked him to turn on his camera, it turned out to be Sun Yuchen himself.

This behavior sparked community speculation: even if FDT did not transfer the money as required, Sun Yuchen’s reluctance to be the legal person of Techteryx and avoid legal responsibility made many question whether there was really embezzlement. Some joked that it was finally Sun Ge’s turn to defend his rights.

Reason for Selection

Maybe FDT also misappropriated funds using vague relationships, or perhaps, as they claim, it was for fund safety. We can only wait for the final result. The world is unpredictable; sometimes cleverness backfires.

Outrageousness Index: ★★★★

Zerebro co-founder Jeffy “fakes death” controversy

Event Details

On May 4, 2025, 22-year-old Zerebro co-founder Jeffy Yu livestreamed on pump.fun, but afterward, multiple community users claimed, “Jeffy Yu committed suicide during the livestream, after smoking a cigarette, he aimed a gun at his neck and pulled the trigger, then the screen went silent.”

The video quickly spread on Twitter, with many expressing regret, but since the video’s authenticity was never confirmed, some questioned whether it was a marketing stunt.

One reason for doubt was that Jeffy Yu had posted an article about “Legacoin” before the livestream. In the article, he proposed the concept of “heritage memecoin” Legacoin (derived from legacy memecoin), with the core promise that developers would only buy and never sell related assets, and after death, lock them permanently on the blockchain to realize “eternal digital inheritance.” On the same day, a token called LLJEFFY was launched on pump.fun.

On May 5, the obituary platform Legacy published a message about Jeffy Yu’s death, not naming him explicitly, but the community generally assumed this Jeffy Yu was the Zerebro co-founder. The next day, Jeffy Yu’s Mirror account posted an article triggered automatically under certain conditions, titled “If you see this article, it means I am dead…” and so on.

Besides this classic opening, the article also included what Jeffy called his final artwork, code-named LLJEFFY “Legacoin,” and his expression of disgust for money: “Once I become somewhat rich and famous online, everything meaningful collapses—friends, family, romantic relationships, co-founders. Everything becomes less pure.”

However, a surprising turn occurred when community influencers Irene Zhao and DeFi developer Daniele exposed Jeffy’s “fake death” plan. According to a leaked letter, Jeffy claimed he had long been harassed and scammed telephonically by a former partner, and then targeted and extorted by another. Jeffy said his home address and phone number were frequently publicized, seriously endangering his safety. These malicious acts also included hate speech targeting his race, gender identity, and personal achievements.

Although Jeffy wanted to withdraw directly, he was worried that publicly announcing his exit would cause the coin’s price to plummet and lead to worse consequences, so he chose to stage a “fake death” and fade from public view. Later, Lookonchain found that on May 7, a wallet possibly related to Jeffy Yu sold 35.55 million ZEREBRO tokens for 8,572 SOL (~$1.27 million), then transferred 7,100 SOL (~$1.06 million) to the LLJEFFY developer wallet (address starting with G5sjgj). Whether Jeffy was truly scared and wanted to exit by faking death, or just wanted to cash out and disappear more safely, remains uncertain.

Reason for Selection

Betrayal, threats—these are not news in the business world. When you participate in a gamble with no guarantees, you should know it’s a game of life and death, wealth and poverty, in the hands of fate.

Outrageousness Index: ★★★

Sui “freezes” hacker funds, sparking “centralization” debate

Event Details

On May 22, 2025, Sui’s largest DEX Cetus was attacked due to a code precision issue, with $223 million stolen through liquidity theft. Two hours after the theft, Cetus announced it had frozen $162 million of the stolen funds.

Regarding how the funds were “frozen,” Sui’s official Chinese account explained: Sui requires 2/3 of nodes to vote in favor for a transaction to be executed. This time, 2/3 of the nodes in the Sui network selectively ignored the hacker’s transaction, preventing the funds from being transferred out. Besides about $60 million worth of cross-chain assets on Ethereum, the assets remaining on Sui were directly held back by the nodes.

So, how to recover the stolen funds? Solayer engineer Chaofan said the Sui team is requesting each validator to deploy a patch so they can “recover” the funds without the attacker’s signature. However, Sui validators responded that they had not received such a “request.” Chaofan later stated that Sui validators currently have not deployed the relevant code.

Reason for Selection

The discussion about centralization vs. decentralization here is not very meaningful. The real question is: if I transfer funds incorrectly on Sui, will Sui help me recover them? Perhaps this is a question worth pondering after “breaking the precedent.”

Outrageousness Index: ☆

Conflux “reverse backdoor listing” failed

Event Details

On July 1, 2025, Hong Kong-listed company Linghang Medical Biotechnology announced it had signed a memorandum of understanding with Northwestern Foundation (the seller) and Conflux regarding a potential acquisition of all shares of the target company, contingent upon the target completing the acquisition of Conflux assets as per the agreement. Conflux assets include certain assets and/or businesses related to the Conflux blockchain and technology, to be defined by Linghang Medical Biotechnology.

It sounds complicated, but simply put, Conflux wanted to go public via reverse backdoor listing. Why “reverse”? Because normally, a company wanting to go public acquires a listed company; here, the operation is reversed.

Some might ask, why do I think this is a reverse backdoor listing and not just an acquisition? Because as early as early April, Linghang Medical announced that Dr. Long Fan and Dr. Wu Ming became executive directors of the company, and these two are Conflux’s founders. On August 21, Linghang Medical announced plans to issue 145 million shares to raise HKD 58.825 million. The net proceeds would be used entirely for developing blockchain technology. Later, at the end of September, Linghang Medical changed its name to Xing Tai Chain Group.

In theory, riding the wave of Web3, the stock price should soar. The good news is it did rise for a while; the bad news is it fell even more afterward. On September 12, the previous plan to raise nearly HKD 60 million failed because certain conditions were not met before September 11, causing a sharp drop in stock price. After the name change at the end of September, the decline worsened…

Before the market opened on November 17, 2025, Xing Tai Chain announced it was ordered by HKEX to suspend trading on November 26 due to doubts about its continued listing eligibility.

Reason for Selection

HKEX’s use of “failed to meet continued listing requirements” to suspend trading is already quite polite. Although Hong Kong strongly supports Web3 development, such behavior feels like treating others as fools.

Outrageousness Index: ★★★★

“Returning to China next week” Jia’s accountant is back in crypto圈圈

Event Details

On August 17, 2025, Jia Yueting’s electric vehicle company Faraday Future (FF), with quarterly revenue of only tens of thousands of USD but net losses over 100 million USD, announced the launch of the “C10 Index” and the “C10 Treasury” product, officially entering the crypto asset field.

The C10 Index tracks the top ten cryptocurrencies globally (excluding stablecoins), including Bitcoin, Ethereum, Solana, and other mainstream assets. The C10 Treasury adopts an 80% passive + 20% active investment model to ensure sustainable returns. According to its official website, FF will use dedicated financing funds to purchase crypto assets, meaning FF will raise funds from the market and use that to buy crypto assets. The first phase aims to acquire $500 million to $1 billion worth of crypto assets once the necessary funds are secured, with the initial $30 million expected to start this week. The long-term vision is to expand to $10 billion and achieve compound growth through staking yields.

After the official announcement, Jia indeed secured funding, even investing $30 million in Qualigen Therapeutics, Inc. to help transition into crypto assets, with Jia personally serving as an advisor.

Recently, Jia even announced a partnership with Tesla, where Faraday Future’s new model can directly connect to Tesla’s supercharging network, and he expressed willingness to cooperate fully with Tesla on FSD technology.

Reason for Selection

Jia Yueting really has some skills—most people can’t learn it. The only reason this isn’t rated five stars is to give Milei some face.

Outrageousness Index: ★★★★☆

USDX project team “borrows money to cash out,” founder “has an impressive track record”

Event Details

On November 5, 2025, after xUSD suffered huge losses caused by third-party “curators,” user 0xLoki discovered that a wallet, which only needed one day to redeem minted sUSDX stablecoins, ignored annualized interest rates over 30% and drained all liquidity pools on Euler that used USDX and sUSDX as collateral.

USDX was issued by usdx.money, which announced at the end of last year that it completed a $45 million funding round at a valuation of $275 million. Its mechanism is almost identical to USDe, with the only difference being that USDX also implements a delta-neutral strategy on altcoins, aiming for higher yields, according to the project team.

Investigation revealed two suspicious addresses that had been receiving large amounts of USDX and sUSDX since late October, draining all liquidity channels on-chain via lending, DEX trading, etc., leaving many lenders with bad debts. The problem, as mentioned earlier, is that this stablecoin should only need one day to redeem the original USDT.

More alarmingly, one of these suspicious addresses is directly related to Flex Yang, founder of usdx.money. Both the founders are eager to cash out. Besides the project already having issues, are there other explanations? On the night after my article was published, USDX started to de-peg severely, confirming the project’s problems. On November 8, Stables Labs tweeted they would help affected users based on available resources and opened registration channels, but that was the last tweet from Stables Labs, and the actual progress remains unknown.

Further digging shows that Flex Yang is also the founder of PayPal Finance and HOPE. PayPal faced insolvency issues during the 2022 bear market, entering a long restructuring process, with uncertain prospects to this day; HOPE’s lending products were attacked and suffered setbacks, though not officially bankrupt, they gradually exited the market.

Reason for Selection

The biggest lesson from history is that people never learn from history. Entrepreneurs fail repeatedly, but recurring issues with risk control—are they truly targeted or just insider theft?

Outrageousness Index: ★★★

Berachain gives venture capitalists “at face value” exit clauses

Event Details

On November 25, according to Unchained, documents disclosed that Layer1 project Berachain provided a special refund clause to Brevan Howard’s Nova Digital fund during Series B financing, making its $25 million investment nearly “risk-free.”

Berachain co-founder Smokey the Bera responded later, denying the accuracy of the report, emphasizing that Brevan Howard remains one of the largest investors, with complex commercial agreements involved, and that Nova Digital’s terms were designed to hedge against token failure to list. Berachain stated that Nova Fund proactively approached and proposed to lead the round before financing, based on a unified set of terms. The controversial side agreement was to meet Nova’s compliance requirements, not to protect principal from market losses. Brevan Howard is still one of Berachain’s largest token holders and has continued to increase its BERA holdings amid market volatility, contrary to the report suggesting it has exited.

According to the disclosed documents, Nova Digital invested $25 million in Berachain in March 2024, purchasing BERA tokens at $3 each. As a co-lead investor in Series B, the fund obtained a side agreement signed on March 5, 2024, granting the right to demand full refund within one year after TGE. This means if BERA’s price performs poorly, Nova Digital can request Berachain to return all investment principal before February 6, 2026.

Another point of controversy is whether Berachain should disclose this special clause to other Series B investors. Two anonymous investors said the project did not inform them that Nova Digital had a refund right. Lawyers pointed out this might violate securities law disclosure requirements of “material information.”

Reason for Selection

If Berachain’s shady operation is true, it can be considered as using Nova Digital’s fame for hype, akin to fraud. So, do you still naively think Web3 should avoid strict regulation?